Walker's World: France, growth and Europe

PARIS, April 30 (UPI) -- The French presidential campaign, now in its final week, has taken on a broader meaning as other European countries see France offering a growth-oriented alternative to the German-led politics of austerity that is blamed for deepening the recession.

Both the incumbent President Nicolas Sarkozy and the front-running Socialist candidate Francois Hollande are openly challenging the German insistence on budget cuts and fiscal discipline.

"Don't we have the right to talk about the role of Europe and its function to protect us rather than expose us to globalization?" Sarkozy said Sunday in an interview with Le Parisien.

"For several weeks, the ideas I propose have been gaining ground not just in France but the whole of Europe," Hollande told French radio, citing recent appeals for more growth and less austerity from the leaders of Spain, Portugal and Italy. "It is not for Germany to decide for the rest of Europe."

Hollande had long campaigned for the European Investment Bank and the European Union's structural funds to be given clear and priority commitments to job creation. He claimed vindication when his proposals were given a cautious welcome over the weekend by German Chancellor Angela Merkel, even though she insisted there could be not going back on Europe's "fiscal compact" to slash budget deficits.

"Now Merkel says she is ready to do more for growth," Hollande said. "A few weeks ago, Merkel didn't even want to hear the word growth, she was only talking about austerity. Now there will be a renegotiation. There will be a growth pact."

Pressure is mounting across Europe for a new economic strategy as the continent drifts into a double-dip recession. Last week in Germany, France and Italy, the Purchasing Managers' Index (a key indicator of future economic activity) slumped back to the level of the fall of 2008, immediately after the Lehman Brothers bankruptcy.

Britain is officially into a second recession, after two successive quarters of economic contraction. So is Spain, where unemployment is more than 24 percent.

And in France Sarkozy was damaged by Friday's unemployment figures. Another 16,600 jobs were lost last month, reaching a total of 2.88 million unemployed, at 9.3 percent the highest level France has seen since 1999.

Still, the election contest appears to be tightening. Two polls indicate the race to be within the pollsters' margin of error although Hollande still has a clear lead in most polls. However, Sarkozy probably has the better machine to get out the vote. But he has been hurt by new allegations that Libya's Moammar Gadhafi regime helped finance his 2007 election campaign, which he denies, pointing out that along with Britain he led the way in rallying NATO military support to help overthrown Gadhafi.

The key to Sunday's election will be the 18 percent of voters who picked the Front National's Marine Le Pen in the first round. Pollsters had expected more than half of them to vote for Sarkozy in the runoff but Le Pen has appealed to her voters to abstain rather than give Sarkozy a second term.

She says her party will do far better in the June parliamentary elections for the National Assembly if Sarkozy is defeated and his center-right UMP party is in disarray. She says that UMP could split, with many of its supporters coming to her and many of its deputies hurriedly trying to negotiate electoral pacts the keep their seats.

"There will be a political reconstruction," Le Pen said over the weekend. "If we get into Parliament we will shake everything up."

Le Pen's model is the Dutch anti-immigration leader Geert Wilders, who has become the king-maker in the Dutch Parliament, forcing a government collapse this month when he withdrew support from the coalition government.

Across Europe, five years of the financial crisis and rising unemployment are shaking up traditional party systems, giving new weight to extremist parties of right and left and to regional parties from Scotland to Spain and northern Italy.

Sarkozy has shifted his rhetoric sharply to the right over the past week as he sought to win Le Pen's voters, saying there were too many foreigners in France and that they should not get an automatic right to vote (as Hollande proposes). Sarkozy, who made his name as a tough minister of the Interior a decade ago, also said last week that the police needed a broader license to shoot at escaping criminals.

In France, May 1 is a holiday, usually filled with labor union parades and this year's is likely to see some tension between Sarkozy's planned rallies and others for the Socialists and the revitalized Communists, whose Left Front candidate Jean-Luc Melenchon won 11 percent of the vote in the first round. In a further sign of the political disruptions coming from the financial crisis, that was the far left's best result in decades.

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